REACH Consulting Group evaluated Confidential Client’s procurement profile using trend, horizontal, and vertical analyses as well as ratios such as past spend, Current and Quick ratios. Other calculations included rates of return, represented through percent savings. Further, when reviewing the savings program for indirect expenditures commodity-rich areas were detailed from top cost and top volume data to deliver an accurate representation for each supplier.

REACH Consulting Group analyzed $571,000.00 in potential indirect expenditure spend, the areas reviewed were:

1. Office Products
2. Legal Supplies
3. Courier Services
4. Printing
5. Breakroom Supplies- Coffee/Vending Services

Analysis Methodology

Office Supplies

REACH Consulting Group delivered robust cost management solutions to Confidential Client in the area of Business Products. REACH reviewed a business products program that was fragmented between two office product suppliers, one  a large national vendor and the other a small local vendor for supplies.  All things being equal, both suppliers were well respected for service and provided quality product. Further, both suppliers represented near equal percentage volume share for office supply orders.

Supplier I (Large National Distributor),

• Provided Contract file of 200 items
• National presence with large buying power
• Adequate account representation

Supplier II ( Small Local Distributor)

• Provided a Top-50 Contract file, with standard discount off MSRP.
• Local presence and affiliation with Atlanta Law firms
• Focused on account representation

After reviewing the business product offerings detailed by RFP responses by both Suppliers, a third supplier was introduced as a possible solution for business products. Ultimately, the third supplier provided pricing and service which best reflected the needs of our client. 

REACH Consulting Group’s analysis resulted in the following cost-management deliverables:

• Reduced annual expenditures in business products by 22 percent.
• Established a “best-value provider”, consolidating multiple suppliers into a single vendor solution.
• Identified areas for standardization and product rationalization for the reduction of redundant/ outdated sku’s.
• Negotiated critical service improvements-AM Delivery, Eliminated product substitutions, and enhanced electronic ordering capabilities.
• Expanded the complete Confidential Client contract file to 455 items from an initial 250 contract sku’s.

Legal Supplies

REACH Consulting Group identified several areas for the consolidation of several legal supply items. Legal folders, expanding folders, and stationary were analyzed and our review resulted in:

• REDUCED annual expenditure for Legal supplies by 23 percent.
• Improved delivery efficiency
• Consolidated vendors

Courier Services

REACH Consulting Group analyzed Confidential Client’s Courier program, our review resulted in:

• REDUCED annual expenditure for Courier Services by 57 percent.
• Introduction of a new courier provider
• Elimination of multiple package billing
• Improved courier professional image

Printing

REACH Consulting Group analyzed the Printing needs of Confidential Client, our review resulted in:

• Extended pricing terms
• Negotiated 1 year guarantee for paper pricing.
• Eliminated outdated products.

Breakroom Supplies

REACH Consulting Group analyzed the Breakroom supply contract for Confidential Client, our review resulted in :

• Price guarantee for Coffee/Soft drink vendor
• Annual price increase limitation of 5 percent.
• Increase service guarantee.

Findings in

Business Products

Legal Supplies

Courier Services

Printing

Breakroom

REACH Consulting Group delivered a comprehensive analysis for the review of indirect expenditures. Our review determined that several vendors exceeded widely established profit margins and were well beyond accepted profitability standards. Implementing our recommendations has allowed Confidential Client to reduce their overall FY2009 expenditures by 28 percent.

Conclusion